Non-UK tax residents are generally not liable to capital gains tax (CGT) in the UK, on the disposal of assets. However, there are exceptions to this, in particular capital gains on UK based land/property and the rules applying to temporary non residents. This is especially relevant for taxpayers who leave the UK and become non-UK tax resident, as they may not be aware of their UK tax and compliance obligations. Non-UK Residents and Capital Gains on UK Property As noted above, individuals are generally not liable to CGT on capital gains when they are non-UK tax resident. However, where the gain arises on land/property based in the UK, then the gain is subject to UK tax. The rules also extend to assets that derive at least 75% of ...

The implementation of the EU’s Fifth Money Laundering Directive in the UK has meant that more trusts are now required to register with the Trust Registration Service. All UK express trusts, including non-taxable trusts, are now required to register, unless they are specifically excluded. As you may have seen in our previous articles, there have been several delays to the upgraded TRS as it was originally meant to be implemented in summer 2021. However, several months later, HMRC have now announced that the new Trust Registration Service will be open for non-taxable trust registrations from the beginning of September. To find out further information about which trusts must register with the TRS, and those that are excluded, take ...

We recently wrote an article on the delays to the upgraded Trust Registration Service. HMRC have now announced that the upgraded Trust Registration Service is now expected to be rolled out in Autumn 2021 rather than Summer 2021 (which was announced recently by HMRC), causing further delays in allowing trusts to register on the Trust Registration Service. HMRC have also now confirmed that they will be extending the deadline to register to approximately 12 months from the delivery of the upgraded Trust Registration Service to provide additional time for registration. Related Articles https://www.pd-taxconsultants.co.uk/extension-to-the-uk-trust-registration-service-deadline-delay-to-upgraded-trust-registration-service/

UPDATE: HMRC have now announced that the upgraded Tax Registration Service is expected to be rolled out in Autumn 2021 (rather than Summer 2021 as noted below). Stay tuned for more updates as they arrive! In light of delays, HMRC has announced that the deadline for registering certain trusts and updating records under the Trust Registration Service ("TRS") is likely to be extended from 10 March 2022 to 12 months after the date of the delivery of the upgraded TRS. The implementation of the EU’s Fifth Money Laundering Directive in the UK has had an impact on the registration of trusts, as more trusts are now required to register with the TRS who were previously not required to register (although there are still some trusts that are ex...

When looking at the capital gains tax (CGT) position following a disposal of an asset, it is important to understand that CGT follows the beneficial interest in the property (as opposed to the legal title). Establishing the owner(s) of the beneficial interest should be considered on a case-by-case basis. The case of Asif Bhikhi v HMRC (2020) demonstrates the importance of properly documenting transfers of property which can often be overlooked in transactions between family members. In this case, the First-Tier Tribunal (FTT) held that there was insufficient evidence to demonstrate that the appellant retained their beneficial ownership of a property on a transfer. In any case, even if there had been an implied trust in place, the transfe...

HMRC has confirmed that the concession for trusts in receipt of small amounts of interest income has been extended to include the 2021/22 and 2022/23 tax years. Under the arrangement, trustees and personal representatives ("PRs") are not required to submit tax returns or make payments under informal arrangements where the only source of income is savings interest and the tax liability is less than £100. Why was the concession introduced? From 6 April 2016, banks and building societies stopped withholding income tax on interest paid to individuals and trusts. Whilst individuals were awarded with a  “Personal Savings Allowance” enabling them to earn up to £1,000 interest tax free, this allowance was not extended to trusts. ...

Follower and accelerated payment notices were introduced in Finance Act 2014 with a view to addressing taxpayers and promoters involved in tax avoidance schemes. The objective of these rules was to improve efficiency with dealing with tax avoidance schemes and to ensure that tax in dispute in relation to the use of an avoidance scheme is held by HMRC until it is resolved. However, these measures have been criticised as draconian by some of those affected, citing the lack of right of appeal and scepticism over whether they are sufficiently targeted as areas for concern. What is a Follower Notice? Where marketed tax avoidance schemes are entered into by a large number of taxpayers, it is more efficient for HMRC to investigate a re...

In its first report from November 2018, the Office of Tax Simplification (OTS) highlighted the significant difference the number of IHT forms submitted each year (275,000), and the number that resulted in inheritance tax (IHT) being due (24,500), highlighting the administrative burden of the current system. In its second report, the OTS provides suggestions of how the system could be made easier to understand, more intuitive, and simpler to operate. Recommendations Lifetime Gifts A number of IHT reliefs/exemptions apply on gifts made during a person’s life. The OTS note that these can be confusing and difficult to apply, and have therefore made the following recommendations: 1 - Replacement of several monetary gift exemptio...

HMRC has changed the registration deadline on its disguised remuneration (DR) settlement opportunity. Those looking to take advantage of this opportunity should register their interest as soon as possible. Background As reported in our previous blog, HMRC is currently running a settlement opportunity for users of DR schemes to settle their tax affairs before a new loan charge comes into effect in April 2019. HMRC had stated that users must register their interest by 31 May 2018 and submit all the required information by 30 September 2018. These dates were designed to give HMRC enough time to process cases before the April 2019 loan charge comes into effect. New Deadline Despite the 31 May deadline for registrations havi...

As covered in our previous blog, the introduction of the new online Trust Registration Service (TRS) has been repeatedly delayed as a result of problems with the introduction of the new system. On 5 March 2018, HMRC contacted the professional bodies outlining its policy for charging administrative penalties for the late registration of trusts and estates. HMRC previously confirmed that while the normal deadline of the 31 January for existing trusts and estates would remain in place, it would not charge penalties where registration took place by 5 March 2018. Penalties HMRC can impose the following penalties for late registration: Up to three months late - £100 penalty Three to six months late - £200 penalty More tha...